Real effective exchange rate of Azerbaijani manat soars again

Baku. 15 January. REPORT.AZ/ The real effective exchange rate (REER) of manat has made 94.9 points as of December 1, 2017.

Report informs referring to the Central Bank of Azerbaijan (CBA), this is 1.3 percentage points more than the same indicator as of November 1, 2017. The real effective exchange rate increased by 4.6 percentage points compared to same period of the previous year.

The reason for growth in real effective exchange rate is the fact that the national currencies of the major trading partner countries of Azerbaijan - Turkish lira, Russian ruble and Chinese yuan declined against the US-dollar in November. Notably, real effective exchange rate of Azerbaijani manat is calculated since 2000; its lowest rate was 74.2 in 2004, the highest was 153.1 in 2015. The lowest reported rate after beginning of financial crisis was 87 on September 1, 2016.

Notably, real effective exchange rate measures the value of a currency against a basket of other currencies; it takes into account changes in relative prices and shows what can actually be bought. An increase in REER implies that exports become more expensive and imports become cheaper; therefore, an increase indicates a loss in trade competitiveness.

Analytical Group of Report News Agency believes, exchange rate of manat at 85-90 points level is satisfactory. It is projected that the results of real effective exchange rate in December will show the growth.